Malaysia Daily, Maybank KE (2014-12-17)

Daily 17 December 2014 RESULTS REVIEW Gamuda: Maintain Buy 1QFY15: On track  Shariah-compliant Results were in line, net profit up 12% YoY. Revising FY15/16 EPS by -5%/-11% to reflect KVMRT 2 project timing and slower property sales. Main beneficiary of infrastructure projects. Maintain BUY. Click here for full report » SP Setia: Maintain Buy Beat our expectation  Shariah-compliant FY10/14 core net profit of MYR376m (-10% YoY) beat our expectation by 8% but was below consensus estimates. Huge unbilled sales of MYR11b should mitigate uncertainties over the departure of senior management. Fine-tuned earnings by -1% to -6%. Maintain BUY with a higher MYR4.07 TP (+9sen; on unchanged 0.73x P/RNAV). Click here for full report » Top Glove: Maintain Hold In line but lacks solid growth  Shariah-compliant Positive 1QFY8/15 results within expectations. Looming price competition could cap growth. Maintain HOLD; TP is reduced to MYR4.60 (14x 2016 PER). Click here for full report » Technicals Loss of market confidence. Target 1,630 The FBMKLCI tumbled 23.37 points to 1,673.94 yesterday, while the FBMEMAS and FBM100 also closed lower by 129.53 points and 128.94 points, respectively. We recommend a �Sell on Rallies� stance for the index. Trading idea is a Take Profit call on TDM with downside target areas at MYR0.65 & MYR0.30. Click here for full report » Other Local News Utilities: 1Malaysia Development (1MDB), Gets 7% discount. 1MDB will purchase a 310-acre (125ha) vacant lease-hold land in Pulau Indah, Klang for MYR294.37m from Tadmax Resources, which is at a MYR23m or 7% discount to the original MYR317.34m that was agreed upon in a share sale agreement (SSA) on Feb 20 this year. The supplementary agreement on Monday also stipulated that the land will be sold on an 'as is where is basis' in place of Tadmax being obliged to undertake a conversion of the use of the land from building to industry. The completion of the deal shall be on or before June 30 next year. (Source: The Edge Financial Daily) Malaysian Airline System: Jentayu fails to meet Khazanah. Jentayu Danaraksa Sdn Bhd has failed in its bid to meet with Khazanah Nasional yesterday to discuss the proposed MYR8.75b plan to revive the ailing Malaysian Airlines (MAS) after the meeting was canceled at Khazanah's request with no explanation given. (Source: The New Straits Times) In a separate note, Malaysian Aerospace Engineering Sdn Bhd (MAE), a wholly-owned subsidiary of MAS has disposed of its 44.61% stake in MAS GMR Aerospace Engineering Co Ltd to India GMR Infrastructure Ltd. (Source: The Edge Financial Daily) Petronas Gas: Becomes controlling shareholder of Dialog's PLNG-2 unit. Petronas Gas (PetGas) is now the controlling shareholder in Pengerang LNG (Two) Sdn Bhd (PLNG-2), a special vehicle previously wholly-owned by Dialog LNG Sdn Bhd, which in turn is a wholly-owned unit of Dialog Group. PetGas has subscribed for a 72.22% stake in PLNG-2 for MYR780k cash. (Source: The Edge Financial Daily) LFE Corp: Bags MYR350m Shapadu City Village job. LFE Corp has won a MYR350m provisional contract from Shapadu Corp Sdn Bhd to build the proposed MYR600m Shapadu City Village development in Putrajaya. The three-year project involves the engineering, procurement and construction of Shapadu City Village. (Source: The Edge Financial Daily) Outside Malaysia U.S: Real estate recovery uneven as housing starts fall. Housing starts declined 1.6% MoM, the first drop since August, to a 1.03 million annualized rate from a revised 1.05 million pace in October that was stronger than previously estimated, figures from the Commerce Department showed. The decrease was led by a plunge in the South as other areas registered gains. (Source: Bloomberg) E.U: Manufacturing and services in the 18-nation euro area barely expanded in December as sluggish growth in Germany and France kept business activity subdued. Markit Economics said a composite index for manufacturing and services rose to 51.7 from 51.1 in November, just above the 51.5 level forecast by economists in a Bloomberg survey. A factory gauge increased to 50.8 from 50.1, while a measure for services rose to 51.9 from 51.1. (Source: Bloomberg) Germany: Private-sector growth slowed to the weakest in 18 months in December, increasing the risk that a soft phase will turn into a more pronounced economic downturn. Markit Economics said a Purchasing Managers Index for manufacturing and services fell to 51.4 this month from 51.7 in November. A factory gauge rose to 51.2 from 49.5, crossing the 50 mark that divides expansion from contraction, while a measure for services fell to 51.4 from 52.1. (Source: Bloomberg) U.K: Inflation slows to least since 2002 on oil prices. The rate of consumer-price growth dropped to 1% YoY, the least since 2002, from 1.3% YoY in October, the Office for National Statistics said in London. (Source: Bloomberg) Russia: Ruble sinks to record low defying surprise rate increase. The ruble plummeted into a freefall, losing as much as 19% as panic swept across Russian financial markets after a surprise interest-rate increase failed to stem the run on the currency. The ruble sank beyond 80 per dollar, a record low, before rebounding after Economy Minister Alexei Ulyukayev denied speculation that the government would turn to foreign-exchange restrictions to stop Russians from converting money into dollars. (Source: Bloomberg) China: Factory gauge fell to a seven- month low in December even after efforts by the central bank to ease monetary conditions, suggesting more stimulus will be needed to halt the slowdown. The preliminary Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics fell to 49.5, missing the median estimate of 49.8 in a Bloomberg survey and lower than last month's 50.0. Numbers below 50 indicate contraction. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,673.9 (10.3) (1.4) JCI 5,026.0 17.6 (1.6) STI 3,215.1 1.5 (2.4) SET 1,461.7 12.6 (1.1) HSI 22,670.5 (2.7) (1.6) KOSPI 1,904.1 (5.3) (0.8) TWSE 8,950.9 3.9 (0.4) DJIA 17,068.9 3.0 (0.7) S&P 1,972.7 6.7 (0.8) FTSE 6,331.8 (6.2) 2.4 MYR/USD 3.489 6.5 (0.2) CPO (1mth) 2,113.0 (19.6) (1.9) Crude Oil (1mth) 55.9 (43.2) 0.0 Gold 1,197.0 (0.4) 0.3 TOP STOCK PICKS Buy rated large caps Price Target Tenaga 13.15 16.00 Axiata 6.82 7.60 Sime Darby 8.78 10.20 Gamuda 4.80 6.00 SP Setia 3.24 3.98 AFG 4.69 5.50 HSL 1.62 2.15